Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix. Anand Rathi Research India Equities India I Equities Country Daily 7 March 2014 India Morning Bell All the latest research and data Persistent Systems - CloudSQUADS: Moving up the value chain. CloudSQUADS, founded in 2009, is predominantly into strategy consulting for organizations, helping them build brands and conduct marketing campaigns on the internet through various social/collaboration platforms. While most companies are becoming more sensitive to their web presence (social networks, forums, blogs, review sites), this is more important for consumer-facing organizations. The Persistent Systems stock quotes at 18.1x FY14e EPS and 9.2x FY14e EBITDA. But, considering the emerging business growth prospects and the offerings portfolio that the company is accumulating, the stock does not look so rich to us. Mcleod Russel India - Overseas green tea acquisition; Buy. Mcleod Russel recently purchased for $0.8m a factory in Vietnam with capacity to process 0.6m kg of green tea. Though small, this acquisition is a significant development for the company as it has till now manufactured and processed only black tea in India and overseas. At the ruling price of `291, the stock trades at a P/E and an EV/EBIDTA of 9.3x and 6.7x, respectively, discounting its FY14e consolidated figures. We have maintained our price target of `344 and our Buy recommendation on the stock in light of the improving financial profile. Sensex: 21514 Nifty: 6401 India: Forex reserves accumulated in the quarter -9 -6 -3 0 3 6 9 12 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 (% of GDP) Current account Capital account Source: The RBI Chart of the day Markets 6 Mar ’14 1 Day YTD Sensex 21514 1.1% 1.6% Nifty 6401 1.1% 1.5% Dow Jones 16422 0.4% -0.9% S & P 500 1877 0.2% 1.6% FTSE 6788 0.2% 0.6% Nikkei* 15235 0.7% -6.5% Hang Seng* 22730 0.1% -2.5% Volumes (US$m) 6 Mar ’14 1 Day Avg '14 Cash BSE 440 15.5% 335 Cash NSE 2,136 10.7% 1,670 Derivatives (NSE) 24,211 25.3% 22,592 Flows (US$m) 6 Mar ’14* MTD YTD FII – Cash Buy 661 1,995 19,827 Sell 453 1,604 19,307 Net 208 392 596 FII - Derivatives Buy 3,478 10,453 134,928 Sell 3,048 9,567 132,865 Net 430 885 2,063 DII – Cash Buy 162 945 2,797 Sell 255 871 3,542 Net -93 74 -745 Others 6 Mar ’14 1 Day YTD Oil Brent (US$/bbl)* 108.2 0.1% -1.9% Gold (US$/oz)* 1,350.1 -0.1% 12.0% Steel (US$/MT) 595.0 0.0% 1.7% `/US$ 61.12 0.0% 1.1% US$/Euro* 1.39 0.0% -0.8% Yen/US$* 103.01 0.1% 2.2% Call Rate 7.05% -145.bps -170.bps 10-year G-Secs 8.79% .bps -3.2bps EMBI spreads 340.45 -3.6bps 6.2bps @7:30am *Provisional Source: BSE, Bloomberg
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Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix. Anand Rathi Research India Equities
India I Equities Country
Daily
7 March 2014
India Morning Bell
All the latest research and data
Persistent Systems - CloudSQUADS: Moving up the value chain. CloudSQUADS, founded in 2009, is predominantly into strategy consulting for organizations, helping them build brands and conduct marketing campaigns on the internet through various social/collaboration platforms. While most companies are becoming more sensitive to their web presence (social networks, forums, blogs, review sites), this is more important for consumer-facing organizations. The Persistent Systems stock quotes at 18.1x FY14e EPS and 9.2x FY14e EBITDA. But, considering the emerging business growth prospects and the offerings portfolio that the company is accumulating, the stock does not look so rich to us.
Mcleod Russel India - Overseas green tea acquisition; Buy. Mcleod Russel recently purchased for $0.8m a factory in Vietnam with capacity to process 0.6m kg of green tea. Though small, this acquisition is a significant development for the company as it has till now manufactured and processed only black tea in India and overseas. At the ruling price of `291, the stock trades at a P/E and an EV/EBIDTA of 9.3x and 6.7x, respectively, discounting its FY14e consolidated figures. We have maintained our price target of `344 and our Buy recommendation on the stock in light of the improving financial profile.
Sensex: 21514
Nifty: 6401
India: Forex reserves accumulated in the quarter
-9
-6
-3
0
3
6
9
12
Dec
-06
Jun-
07
Dec
-07
Jun-
08
Dec
-08
Jun-
09
Dec
-09
Jun-
10
Dec
-10
Jun-
11
Dec
-11
Jun-
12
Dec
-12
Jun-
13
Dec
-13
(% o
f GD
P)
Current account Capital account
Source: The RBI
Ch
art
of
the
da
y
Markets 6 Mar ’14 1 Day YTD Sensex 21514 1.1% 1.6%Nifty 6401 1.1% 1.5%Dow Jones 16422 0.4% -0.9%S & P 500 1877 0.2% 1.6%FTSE 6788 0.2% 0.6%Nikkei* 15235 0.7% -6.5%Hang Seng* 22730 0.1% -2.5%
CANARA BANK 228 266 (14.0) BANK OF MAHARASH 31 40 (21.5) SPICEJET LTD 14 21 (35.9)
Small Caps(US$100m-250m)
Large Caps(>US$1bn)
Mid Caps(US$250m-1bn)
Source: Bloomberg
Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix. Anand Rathi Research India Equities
Technology
Company UpdateIndia I Equities
Key financials (YE Mar) FY10 FY11 FY12 FY13 FY14
Sales (US$m) 127 170 207 238 273
Sales (`m) 6,012 7,758 10,003 12,945 16,622
Net profit (`m) 1,149 1,397 1,418 1,876 2,521
EPS (`) 36 37 37 48 63
Growth (%) 69% 4% 0% 31% 30%
PE (x) 39.8 32.7 32.2 24.4 18.1
PBV (x) 7.2 6.1 5.4 4.5 3.8
RoE (%) 22% 20% 18% 20% 23%
RoCE (%) after tax 20% 15% 15% 19% 20%
Dividend yield (%) 0% 0% 0% 0% 0%
Source: Company, Anand Rathi Research
7 March 2014
Persistent Systems
CloudSQUADS: Moving up the value chain
Key takeaways
Introduction to CloudSQUADS: CloudSQUADS, founded in 2009, is predominantly into strategy consulting for organizations, helping them build brands and conduct marketing campaigns on the internet through various social/collaboration platforms. While most companies are becoming more sensitive to their web presence (social networks, forums, blogs, review sites), this is more important for consumer-facing organizations. An important feature of CloudSQUADS’ offering is its ability to gather and analyze unstructured internet data and influence future product pipelines of client organizations, thus rendering them more agile to changing customer preferences/wants. How it works: CloudSQUADS captures client-related data from FaceBook, Twitter, forums, blogs and similar online customer communities and analyses them to come out with specific recommendations for its clients. The company has built connectors (CloudSQUADS IP but co-owned with partners such as Lithium, Salesforce, Jive, BazaarVoice, etc.) to push this unstructured data into client organization’s databases for analyses. Clients can see live customized dashboards to monitor and analyze their brand’s social presence. The business model: Revenue for the company is recurring as the client engagements are not project based. 80% of the company’s revenues are service-linked while the balance is IP-linked. CloudSQUADS has 18-20 employees servicing 70 clients. This suggests that it is highly profitable and free-cash generative. Its growth is not linearly related to employees as automation levels are quite high in the business. CloudSQUADS has no debt on its balance sheet. Our take. The Persistent Systems stock quotes at 18.1x FY14e EPS and 9.2x FY14e EBITDA. But, considering the emerging business growth prospects and the offerings portfolio that the company is accumulating, the stock does not look so rich to us. Risks: Execution risks.
Rating: Not Rated
Share Price: `1,145
Key data PSYS IN / PERS.BO52-week high / low `1220/ `477Sensex / Nifty 21502 / 64013-m average volume US$1.3m Market cap `47bn / US$0.76bnShares outstanding 40m
7 March 2014 Persistent Systems – CloudSQUADS: Moving up the value chain
Anand Rathi Research 3
Synergies with Persistent Systems: Persistent has so far worked on the back-end of collaboration-based solutions, helping clients implement or develop collaboration platforms for employees and customers but have so far focused on the engineering portion. With CloudSQUADS, they have added capabilities on the front end, thus offering complete packaged solutions (collaboration, analytics and insights) to clients and helping them build online communities, run analytics and develop insights from these communities, and influence their product pipelines according to changing customer preferences. CloudSQUADS wanted to scale up fast and Persistent was the preferred option because of its focus on SMAC.
The Clientele
CloudSQUADS has 70 clients, including some prominent consumer-facing businesses such as Aruba Networks (marketing networking products) and Inspire (healthcare communities) and some technology companies such as Siemens and Navis (which builds technology solutions for terminal operators). The company also counts GE, Comcast, BT, Salesforce, Genesys, Logitech, Sandisk, Autodesk, Etrade and Intuit as its customers.
We present here two cases to demonstrate how CloudSQUADS has helped client organizations get better insights and actionable ideas by leveraging on the power of crowd-sourcing and social analytics.
Case Studies
Case 1: Siemens
The problem
Siemens operates across various Internet social channels. It wanted to engage with customers more actively. So far, it was more focused on search-engine optimization and web analytics. The scope of this assignment included cost savings through fewer calls and improved revenues if possible through a community.
CloudSQUADS role
The company started gathering and collating requirements from various stakeholders. It then mapped final requirements (defining the scope of the project) with platform capabilities to determine the best software product vendor for Siemens. Together, Siemens and CloudSQUADS decided to go in for the Lithium platform. At present, the company is deploying the platform and communities for their unified experience. Once it is implemented, Siemens intends to be more responsive to customer conversations on these platforms and adjust its marketing efforts accordingly. At a later stage, Siemens is planning to incorporate customer feedback gained through this platform to its discussion/ decision rooms.
Case 2: ReachOut.com
The problem
ReachOut.com (The Inspire Foundation) is a leading mental-health organization in Australia, attempting to help young people connect, share, and discuss mental-health issues among themselves. While the company had online forums, the discussions or information available in a forum was not integrated with the organization. Hence, the insights generated from such community discussions were not being utilized. Also, the engagement levels in the community were not so high.
7 March 2014 Persistent Systems – CloudSQUADS: Moving up the value chain
Anand Rathi Research 4
CloudSQUADS’ role
The community was shifted from an in-house platform to the Lithium platform. This added fresh dimensions to the analysis and understanding of the discussions in the community. ReachOut.com is now able to better know about emerging demand patterns and is re-allocating its research efforts to the trending areas of discussion. Also, the culture has changed and the community became much more active as new features such as acknowledging top contributors were introduced. The community was also re-seeded with a better mix of members (those seeking help versus those willing to help). ReachOut.com is now aspiring to crowd-source innovative ideas, all made possible because of the buoyant community.
Ability to scale up holds the key
While the cloudSQUADS offering appears rather promising and value-accretive for clients, revenue from it is yet low. Therefore, the ability of Persistent Systems scale up this business would play the key role in determining the success of this acquisition.
7 March 2014 Persistent Systems – CloudSQUADS: Moving up the value chain
Anand Rathi Research 5
Fig 7 – Fact sheet
4QFY12 4QFY13 1QFY14 2QFY14 3QFY14
Revenue split, by nature of engagement (%)
Effort-Led 88 83 85 81 82
IP-Led 12 18 15 19 18
Revenue by vertical (%)
Telecom 21 23 21 18 18
Infrastructure & Systems 68 67 69 69 69
Life Sciences 11 11 10 13 13
Revenue by geography (%)
North America 82 85 88 85 83
Europe 7 6 5 4 6
Asia-Pacific 11 9 8 11 11
Onsite : Offshore Revenue Mix (%)
Onsite Revenues 23 23 25 25 25
Offshore Revenues 77 77 75 75 75
Client Concentration (%)
Top 1 17 22 21 23 20
Top 5 37 37 36 38 37
Top 10 49 48 47 47 47
Number of Clients
Effort-Based NA 279 253 243 253
IP-Led NA 418 387 388 380
Revenue per client (US$ ’000 per quarter)
Effort-Based NA 184 212 228 227
IP-Led NA 26 25 34 33
Employees
Number of Employees 6,628 6,970 7,144 7,457 7,602
Technical 6,223 6,540 6,689 6,982 7,109
S&M 95 99 119 128 139
Support 310 331 336 347 354
Attrition % 18 14 14 14 13
Utilization % 70 73 70 72 73
Source: Company, Anand Rathi Research
Fig 8 – Revenue by vertical
Source: Company, Anand Rathi Research
Fig 9 – Revenue, area-wise
Source: Company, Anand Rathi Research
Fig 10 – Client concentration
Source: Company, Anand Rathi Research
Appendix Analyst Certification The views expressed in this Research Report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. The research analysts are bound by stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and the analysts’ compensation are completely delinked from all the other companies and/or entities of Anand Rathi, and have no bearing whatsoever on any recommendation that they have given in the Research Report. The research analysts, strategists, or research associates principally responsible for the preparation of Anand Rathi Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues.
Anand Rathi Ratings Definitions
Analysts’ ratings and the corresponding expected returns take into account our definitions of Large Caps (>US$1bn) and Mid/Small Caps (<US$1bn) as described in the Ratings Table below:
Ratings Guide Buy Hold Sell Large Caps (>US$1bn) >15% 5-15% <5% Mid/Small Caps (<US$1bn) >25% 5-25% <5% Anand Rathi Research Ratings Distribution (as of 4 March 2014) Buy Hold Sell Anand Rathi Research stock coverage (185) 64% 27% 9% % who are investment banking clients 4% 0% 0% Other Disclosures This report has been issued by ARSSBL which is a SEBI regulated entity, and which is in full compliance with all rules and regulations as are applicable to its functioning and governance. The investors should note that ARSSBL is one of the companies comprising within ANAND RATHI group, and ANAND RATHI as a group consists of various companies which may include (but is not limited to) its subsidiaries, its affiliates, its group companies who may hold positions, views, stakes and may service the companies covered in this report independent of ARSSBL. Investors are cautioned to be aware that there could arise a potential conflict of interest in the views held by ARSSBL and other companies of Anand Rathi who maybe affiliated, connected or catering to the companies mentioned in the Research Report; even though, ARSSBL and Anand Rathi are fully complaint with all procedural and operational regulatory requirements. Thus, investors should not use this as a sole basis for making their investment decision and should consider the recommendations mentioned in the Research Report bearing in mind the aforementioned.
Further, the information herein has been obtained from various sources which we believe is reliable, and we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities (hereinafter referred to as “Related Investments”). ARSSBL and/or Anand Rathi may trade for their own accounts as market maker / jobber and/or arbitrageur in any securities of the companies mentioned in the Research Report or in related investments, and may be on taking a different position from the ones which haven been taken by the public orders. ARSSBL and/or Anand Rathi and its affiliates, directors, officers, and employees may have a long or short position in any securities of the companies mentioned in the Research Report or in Related Investments. ARSSBL and/or Anand Rathi, may from time to time, perform investment banking, investment management, financial advisory or any other services not explicitly mentioned herein, or solicit investment banking or other business from, any entity and/or company mentioned in this Research Report; however, the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the other companies of Anand Rathi, even though there might exist an inherent conflict of interest.
Furthermore, this Research Report is prepared for private circulation and use only. It does not have regard to the specific investment objectives, financial situation and the specific financial needs or objectives of any specific person who may receive this Research Report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this Research Report, and, should understand that statements regarding future prospects may or may not be realized, and we can not guarantee the same as analysis and valuation is a tool to enable investors to make investment decisions but, is not an exact and/or a precise science. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investments mentioned in this report.
Other Disclosures pertaining to distribution of research in the United States of America
This material was produced by ARSSBL, solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the United States of America by Enclave Capital LLC (19 West 44th Street, Suite 1700, New York, NY 10036) and elsewhere in the world by ARSSBL or an authorized affiliate of ARSSBL (such entities and any other entity, directly or indirectly, controlled by ARSSBL, the “Affiliates”). This document does not constitute an offer of, or an invitation by or on behalf of ARSSBL or its Affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from published information and other sources, which ARSSBL or its Affiliates consider to be reliable. None of ARSSBL or its Affiliates accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions.
1. ARSSBL or its Affiliates may or may not have been beneficial owners of the securities mentioned in this report.
2. ARSSBL or its affiliates may have or not managed or co-managed a public offering of the securities mentioned in the report in the past 12 months.
3. ARSSBL or its affiliates may have or not received compensation for investment banking services from the issuer of these securities in the past 12 months and do not expect to receive compensation for investment banking services from the issuer of these securities within the next three months.
4. However, one or more of ARSSBL or its Affiliates may, from time to time, have a long or short position in any of the securities mentioned herein and may buy or sell those securities or options thereon, either on their own account or on behalf of their clients.
5. As of the publication of this report, ARSSBL does not make a market in the subject securities.
6. ARSSBL or its Affiliates may or may not, to the extent permitted by law, act upon or use the above material or the conclusions stated above, or the research or analysis on which they are based before the material is published to recipients and from time to time, provide investment banking, investment management or other services for or solicit to seek to obtain investment banking, or other securities business from, any entity referred to in this report.
Enclave Capital LLC is distributing this document in the United States of America. ARSSBL accepts responsibility for its contents. Any US customer wishing to effect transactions in any securities referred to herein or options thereon should do so only by contacting a representative of Enclave Capital LLC.
Additional information on recommended securities/instruments is available on request.
Anand Rathi Shares and Stock Brokers Limited (hereinafter “ARSSBL”) is a full service brokerage and equities research firm and the views expressed therein are solely of ARSSBL and not of the companies which have been covered in the Research Report. This report is intended for the sole use of the Recipient and is to be circulated only within India and to no countries outside India. Disclosures and analyst certifications are present in Appendix. Anand Rathi Research India Equities
Key data MCLR IN / MCLE.BO52-week high / low `374/`238Sensex / Nifty 21514/64013-m average volume US$1.9mMarket cap `32bn/US$0.5bnShares outstanding 109m
7 February 2014
Mcleod Russel India
Overseas green tea acquisition; Buy
Key takeaways
Acquisition in Vietnam. Mcleod Russel recently purchased for $0.8m a factory in Vietnam with capacity to process 0.6m kg of green tea. Though small, this acquisition is a significant development for the company as it has till now manufactured and processed only black tea in India and overseas. The move is not unexpected, given the rising global popularity of green tea and richer margins in the segment. However, this acquisition may not move the needle too much for Mcleod’s Vietnamese operations as the company already sells ~6m kg of black tea in this area.
Recent dip in Indian prices not too worrisome. The plucking season in northern India concluded a fortnight earlier than expected, with output dipping 2% yoy in Dec’13. However, prices in the domestic auctions for tea leaf and dust have not reflected this shortfall, falling 14% yoy in Feb’14. Channel checks indicate that the poor qualities of teas and dust on offer and the lack of suitable grades are responsible. With all eyes now on the first flush due in Apr’14, the quantities now available at auctions are becoming increasingly irrelevant from a trade perspective in the near term.
Estimates maintained. With the plucking season drawing to an end in 3QFY14, we have maintained our estimates of consolidated turnover at `20bn, with and PAT of `3.4bn. We expect the impact of the Vietnamese green tea factory to percolate into the financials from 2HFY15 and will refine our figures once we obtain some clarity about the profile of the final product.
Our take. At the ruling price of `291, the stock trades at a P/E and an EV/EBIDTA of 9.3x and 6.7x, respectively, discounting its FY14e consolidated figures. We have maintained our price target of `344 and our Buy recommendation on the stock in light of the improving financial profile. Risks. Lower-than-expected sales volumes and weaker realizations pose downside risks to our estimates.
Appendix Analyst Certification The views expressed in this Research Report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. The research analysts are bound by stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and the analysts’ compensation are completely delinked from all the other companies and/or entities of Anand Rathi, and have no bearing whatsoever on any recommendation that they have given in the Research Report. Important Disclosures on subject companies Rating and Target Price History (as of 6 March 2014)
The research analysts, strategists, or research associates principally responsible for the preparation of Anand Rathi Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues.
Anand Rathi Ratings Definitions
Analysts’ ratings and the corresponding expected returns take into account our definitions of Large Caps (>US$1bn) and Mid/Small Caps (<US$1bn) as described in the Ratings Table below:
Ratings Guide Buy Hold Sell Large Caps (>US$1bn) >15% 5-15% <5% Mid/Small Caps (<US$1bn) >25% 5-25% <5%
Anand Rathi Research Ratings Distribution (as of 4 March 2014) Buy Hold Sell Anand Rathi Research stock coverage (182) 64% 27% 9% % who are investment banking clients 4% 0% 0% Other Disclosures This report has been issued by ARSSBL which is a SEBI regulated entity, and which is in full compliance with all rules and regulations as are applicable to its functioning and governance. The investors should note that ARSSBL is one of the companies comprising within ANAND RATHI group, and ANAND RATHI as a group consists of various companies which may include (but is not limited to) its subsidiaries, its affiliates, its group companies who may hold positions, views, stakes and may service the companies covered in this report independent of ARSSBL. Investors are cautioned to be aware that there could arise a potential conflict of interest in the views held by ARSSBL and other companies of Anand Rathi who maybe affiliated, connected or catering to the companies mentioned in the Research Report; even though, ARSSBL and Anand Rathi are fully complaint with all procedural and operational regulatory requirements. Thus, investors should not use this as a sole basis for making their investment decision and should consider the recommendations mentioned in the Research Report bearing in mind the aforementioned.
Further, the information herein has been obtained from various sources which we believe is reliable, and we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities (hereinafter referred to as “Related Investments”). ARSSBL and/or Anand Rathi may trade for their own accounts as market maker / jobber and/or arbitrageur in any securities of the companies mentioned in the Research Report or in related investments, and may be on taking a different position from the ones which haven been taken by the public orders. ARSSBL and/or Anand Rathi and its affiliates, directors, officers, and employees may have a long or short position in any securities of the companies mentioned in the Research Report or in Related Investments. ARSSBL and/or Anand Rathi, may from time to time, perform investment banking, investment management, financial advisory or any other services not explicitly mentioned herein, or solicit investment banking or other business from, any entity and/or company mentioned in this Research Report; however, the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the other companies of Anand Rathi, even though there might exist an inherent conflict of interest.
Furthermore, this Research Report is prepared for private circulation and use only. It does not have regard to the specific investment objectives, financial situation and the specific financial needs or objectives of any specific person who may receive this Research Report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this Research Report, and, should understand that statements regarding future prospects may or may not be realized, and we can not guarantee the same as analysis and valuation is a tool to enable investors to make investment decisions but, is not an exact and/or a precise science. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investments mentioned in this report.
Other Disclosures pertaining to distribution of research in the United States of America
This material was produced by ARSSBL, solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the United States of America by Enclave Capital LLC (19 West 44th Street, Suite 1700, New York, NY 10036) and elsewhere in the world by ARSSBL or an authorized affiliate of ARSSBL (such entities and any other entity, directly or indirectly, controlled by ARSSBL, the “Affiliates”). This document does not constitute an offer of, or an invitation by or on behalf of ARSSBL or its Affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from published information and other sources, which ARSSBL or its Affiliates consider to be reliable. None of ARSSBL or its Affiliates accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions.
1. ARSSBL or its Affiliates may or may not have been beneficial owners of the securities mentioned in this report.
2. ARSSBL or its affiliates may have or not managed or co-managed a public offering of the securities mentioned in the report in the past 12 months.
3. ARSSBL or its affiliates may have or not received compensation for investment banking services from the issuer of these securities in the past 12 months and do not expect to receive compensation for investment banking services from the issuer of these securities within the next three months.
4. However, one or more of ARSSBL or its Affiliates may, from time to time, have a long or short position in any of the securities mentioned herein and may buy or sell those securities or options thereon, either on their own account or on behalf of their clients.
5. As of the publication of this report, ARSSBL does not make a market in the subject securities.
6. ARSSBL or its Affiliates may or may not, to the extent permitted by law, act upon or use the above material or the conclusions stated above, or the research or analysis on which they are based before the material is published to recipients and from time to time, provide investment banking, investment management or other services for or solicit to seek to obtain investment banking, or other securities business from, any entity referred to in this report.
Enclave Capital LLC is distributing this document in the United States of America. ARSSBL accepts responsibility for its contents. Any US customer wishing to effect transactions in any securities referred to herein or options thereon should do so only by contacting a representative of Enclave Capital LLC.
Additional information on recommended securities/instruments is available on request.
Appendix Analyst Certification The views expressed in this Research Report accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. The research analysts are bound by stringent internal regulations and also legal and statutory requirements of the Securities and Exchange Board of India (hereinafter “SEBI”) and the analysts’ compensation are completely delinked from all the other companies and/or entities of Anand Rathi, and have no bearing whatsoever on any recommendation that they have given in the Research Report. The research analysts, strategists, or research associates principally responsible for the preparation of Anand Rathi Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues.
Anand Rathi Ratings Definitions
Analysts’ ratings and the corresponding expected returns take into account our definitions of Large Caps (>US$1bn) and Mid/Small Caps (<US$1bn) as described in the Ratings Table below:
Ratings Guide Buy Hold Sell Large Caps (>US$1bn) >15% 5-15% <5% Mid/Small Caps (<US$1bn) >25% 5-25% <5% Anand Rathi Research Ratings Distribution (as of 4 March 2014) Buy Hold Sell Anand Rathi Research stock coverage (185) 64% 27% 9% % who are investment banking clients 4% 0% 0% Other Disclosures This report has been issued by ARSSBL which is a SEBI regulated entity, and which is in full compliance with all rules and regulations as are applicable to its functioning and governance. The investors should note that ARSSBL is one of the companies comprising within ANAND RATHI group, and ANAND RATHI as a group consists of various companies which may include (but is not limited to) its subsidiaries, its affiliates, its group companies who may hold positions, views, stakes and may service the companies covered in this report independent of ARSSBL. Investors are cautioned to be aware that there could arise a potential conflict of interest in the views held by ARSSBL and other companies of Anand Rathi who maybe affiliated, connected or catering to the companies mentioned in the Research Report; even though, ARSSBL and Anand Rathi are fully complaint with all procedural and operational regulatory requirements. Thus, investors should not use this as a sole basis for making their investment decision and should consider the recommendations mentioned in the Research Report bearing in mind the aforementioned.
Further, the information herein has been obtained from various sources which we believe is reliable, and we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities (hereinafter referred to as “Related Investments”). ARSSBL and/or Anand Rathi may trade for their own accounts as market maker / jobber and/or arbitrageur in any securities of the companies mentioned in the Research Report or in related investments, and may be on taking a different position from the ones which haven been taken by the public orders. ARSSBL and/or Anand Rathi and its affiliates, directors, officers, and employees may have a long or short position in any securities of the companies mentioned in the Research Report or in Related Investments. ARSSBL and/or Anand Rathi, may from time to time, perform investment banking, investment management, financial advisory or any other services not explicitly mentioned herein, or solicit investment banking or other business from, any entity and/or company mentioned in this Research Report; however, the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the other companies of Anand Rathi, even though there might exist an inherent conflict of interest.
Furthermore, this Research Report is prepared for private circulation and use only. It does not have regard to the specific investment objectives, financial situation and the specific financial needs or objectives of any specific person who may receive this Research Report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this Research Report, and, should understand that statements regarding future prospects may or may not be realized, and we can not guarantee the same as analysis and valuation is a tool to enable investors to make investment decisions but, is not an exact and/or a precise science. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investments mentioned in this report.
Other Disclosures pertaining to distribution of research in the United States of America
This material was produced by ARSSBL, solely for information purposes and for the use of the recipient. It is not to be reproduced under any circumstances and is not to be copied or made available to any person other than the recipient. It is distributed in the United States of America by Enclave Capital LLC (19 West 44th Street, Suite 1700, New York, NY 10036) and elsewhere in the world by ARSSBL or an authorized affiliate of ARSSBL (such entities and any other entity, directly or indirectly, controlled by ARSSBL, the “Affiliates”). This document does not constitute an offer of, or an invitation by or on behalf of ARSSBL or its Affiliates or any other company to any person, to buy or sell any security. The information contained herein has been obtained from published information and other sources, which ARSSBL or its Affiliates consider to be reliable. None of ARSSBL or its Affiliates accepts any liability or responsibility whatsoever for the accuracy or completeness of any such information. All estimates, expressions of opinion and other subjective judgments contained herein are made as of the date of this document. Emerging securities markets may be subject to risks significantly higher than more established markets. In particular, the political and economic environment, company practices and market prices and volumes may be subject to significant variations. The ability to assess such risks may also be limited due to significantly lower information quantity and quality. By accepting this document, you agree to be bound by all the foregoing provisions.
1. ARSSBL or its Affiliates may or may not have been beneficial owners of the securities mentioned in this report.
2. ARSSBL or its affiliates may have or not managed or co-managed a public offering of the securities mentioned in the report in the past 12 months.
3. ARSSBL or its affiliates may have or not received compensation for investment banking services from the issuer of these securities in the past 12 months and do not expect to receive compensation for investment banking services from the issuer of these securities within the next three months.
4. However, one or more of ARSSBL or its Affiliates may, from time to time, have a long or short position in any of the securities mentioned herein and may buy or sell those securities or options thereon, either on their own account or on behalf of their clients.
5. As of the publication of this report, ARSSBL does not make a market in the subject securities.
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Enclave Capital LLC is distributing this document in the United States of America. ARSSBL accepts responsibility for its contents. Any US customer wishing to effect transactions in any securities referred to herein or options thereon should do so only by contacting a representative of Enclave Capital LLC.